update SINGAPORE--Visa and the Singapore government have entered into an agreement to enhance the security of online payments globally by implementing a new system that can better detect fraudulent merchants as well as gather evidence to assist in law enforcement investigations against them.

The card payment giant and Singapore's Institute for Infocomm Research (I²R) announced Wednesday an R&D (research and development) partnership to develop a number of software modules that serve as an additional layer of security for payment cardholders, banks and merchants globally. The system will include technologies such as advanced transactional data analysis and digital forensics.

Lye Kin Mun, executive director of I²R, said in a joint statement that the enhancement will include both preventive measures and reactive procedures. I²R is an entity under the Agency for Science, Technology and Research (A*STAR), which is a statutory board under the local government.

According to Visa and I²R, work on the initiative has kicked off and implementation will be carried out in stages, with the system expected to be fully operational by end-2012.

As part of the partnership, the two entities will also identify further opportunities to develop "cutting-edge technologies required to meet the security, compliance and brand management challenges" brought about by an evolving and innovative payment landscape, the organizations said.

ZDNet Asia also understands from Visa that three software modules have been confirmed for rollout by next year, with more in the pipeline. The intent for the security enhancement is to be interoperable with its existing systems, and will be designed to be reliable and convenient for all three groups of stakeholders.